• Restructuring distribution costs and administrative streamlining will lead to
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big cost savings when the single European market is established in 1992, says top management consultants P-E Inbucon.
British firms, however, will have to look carefully at distribution hub locations, reduce warehouse stocks and standardise production if they are to reap the full benefits envisaged by the EEC, it warns.
EEC studies show that companies which adapt successfully can expect a 5% reduction in road transport costs, a 2% cut in unit costs and a 5% increase in sales volume.
P-E Inbucon recently helped a multinational company develop a new European strategy, recommending more frequent deliveries, carrying larger loads of fewer products, and reduced national and international warehouse space with squeezed inventories.
One consultant claimed it had targeted savings of £11.7 million for its client, without any need for plant closures. Another multinational has decided to reduce its stocks in Europe by using a centralised distribution system fed by crossborder deliveries. It is considering dropping nationally-based warehousing altogether.